Apparel Online India Magazine April 2nd Issue 2018 | Page 20

RETAIL UPDATE
Domestic retail an exciting
option for exporters…
But sourcing process still a challenge
Less than a decade ago, most exporters did not even consider the domestic market as an option
for increasing business. The focus was on how to capture more markets abroad and if possible, add
new product categories to get better responses from the buyer. The success stories were few and
exporters found the effort not worth the ‘headache’. But times have changed…, even the most
accomplished exporter is looking to get a footing into the domestic market, either working with
leading Indian brands/retailers or creating their own brands that could compete with international
brands that already exist in the market. Yet, it is not an easy marriage and challenges remain.
I
n a fast-growing retail scenario for
apparel, organised retail accounts
for approximately 30-35% of the total
market; and in the past, to a large
extent, organized retail in apparel has
been confined to menswear and to a
lesser extent to kidswear, which was
primarily more in the unorganised
sector, while the womenswear
readymade segment was practically
non-existent. A recent survey still
puts menswear as the hottest selling
category in domestic retail, but the
real surprise is that the traditional
Indian womenswear segment has
also captivated a large chunk of
the organised retail with all major
retailers stocking the segment. Brands
like W, Biba and Fab India have pulled
more and more women into stores for
ethnic- and semi-ethnicwear, rather
than going to the master jee. As for
women’s westernwear, the trend is
slowly picking up and the advent of
international brands like Zara, Mango,
Esprit, Tommy Hilfiger and a growing
number of young working women has
quickened the pace. Yet, ready-to-wear
trousers and shirts for men are still
the biggest draw in the market today,
while kidswear is among the fastest
growing with many domestic brands
making their mark.
The vibrancy of the domestic market
for apparel and lifestyle products
is attracting not only traditional
manufacturers, but also garment
exporters and even manufacturers
from the neighbouring country
– Bangladesh. While the global
conditions have resulted in slowdown
of retail business worldwide, India has
emerged as a lucrative market. Post-
policy upheavals like implementation
of GST, the opportunities to explore
the Indian market by Bangladesh has
increased and according to Export
Promotion Bureau of Bangladesh,
India had imported US $ 87.4 million
worth of readymade garments from
the country during July-November
2017, registering a sharp rise of 56
per cent compared to US $ 55.92
million during the same period last
year. Most retailers are sourcing from
Bangladesh for the price advantage
that it offers, but with Make in India
becoming a matter of pride and fast
delivers for fresh stock a necessity,
local sourcing is picking up. “We
were earlier sourcing about 40% of
our products from Bangladesh but
we have reduced it to 10%,” claims
Rakesh Biyani, JMD, Future Group.
Indian retailers are on a roll and
leaving China behind. India is now
the most dynamic market with a
rapidly expanding economy and a
consumption boom, according to 2017
Global Retail Development Index
report by AT Kearney. As per recent
analysis, the market for apparel and
lifestyle products in India is currently
estimated at US $ 85 billion and is
expected to reach US $ 160 billion
by 2025. India has traditionally been
the land of small unorganised retail
with ‘mom-and-pop’ stores, situated
20 Apparel Online India | APRIL 16-30, 2018 | www.apparelresources.com
around-practically every residential
area. Those who wanted ‘branded’
garments shopped internationally,
while the upper middle class went to
tailors for customised stitching. Hence
the market was more for textiles
and not so much for readymade
garments… The situation is now
far different, with a rising number
of people looking at readymade
garments as against buying fabric for
‘stitched garments’.
“I think previously
exporters were
used to longer
runs, now they
seek process – a
more systematic
approach
towards business.
Similarly, domestic
retail in the past
hasn’t behaved
in a manner that
suited the business
sensibility of the
exporters, but
now with scaling,
business processes
are falling in line.”
– Rakesh Biyani,
JMD, Future Group
Retailer/Sourcing head’s
take on options for
exporters…
The market trend, even a decade
ago for readymade garments in
womenswear was more of a boutique
mindset, but today the customer has
grown out of it, thus retailers see a
demand of thousands and thousands
of pieces. This shift has led to a better
understanding between exporters and
retailers. “I think previously exporters
were used to longer runs, now they
seek process – a more systematic
approach towards business. Similarly,
domestic retail in the past hasn’t
behaved in a manner that suited the
business sensibility of the exporters,
but now with scaling, business
processes are falling in line; it’s more
professional, and we respect what
exporters are seeking and also what
they are offering to us,” says Rakesh.
The Indian retailers/brands are
increasingly interested to work